How do I correct an error on my credit report?

It is important that you request a copy of your credit report from the two credit-reporting agencies at least once a year to verify that your personal information is up to date, that your financial information is correct, and to ensure that you have not been the victim of identity fraud. You can do this free of charge by contacting both credit bureaus in Canada: Equifax and Trans Union.  Lenders will often refuse credit even if it is clear an error has occurred on your credit report, and they will not issue credit until the mistake is rectified.

To correct an error on your credit report, both credit bureaus provide a form to complete and send back to them.  When completing this form, be as specific as possible.  Once the form is received by the credit bureau and after their investigation, they will either correct the error or not, based on their findings.  Should your dispute be valid, the information on your credit report will be changed according.  If you do not agree with an item following the credit bureau’s investigation, Equifax and Trans Union websites inform you as to how you can add an explanatory statement to your report.

The contact information for the major credit reporting agencies in Canada are as follows:

Equifax Canada

Tel: 1-800-465-7166
Fax: 514-355-8502

Trans Union Canada
Tel: 1-866-525-0262 (For all residents except Quebec)
Tel: 1-877-713-3393 (For Quebec residents)

Give us a call for a free consultation, we would be happy to assist you with a new financial beginning.

Rebuild your Credit with a Secured Credit Card

A secured credit card is a type of credit card that requires you to pay the issuer a security deposit.  You’ll need to put a security deposit down which will be held in a special savings account.  Depending on the credit limit you request, the required security deposit can range from a few hundred to several thousand dollars.  Thus if you put down $500, you will likely be given credit of $500. You might consider applying for a secured credit if you:

  • had filed a consumer proposal or bankruptcy in the past,
  • had credit problems in the past and want to rebuild your credit score,
  • had no credit history.

You are still expected to make regular payments, as you would with a regular credit card, but should you default on a payment, the card issuer has the option of recovering the cost from your security deposit and cancelling your credit card.

The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. Making all your credit card payments on time will help you build a positive credit history or rebuild a poor credit score.  Once your credit score is considered satisfactory, you may be eligible for an unsecured credit card.  At that time, the security deposit may be returned to you if you decide to close your credit card account after paying off the entire balance.

 

 

Life After Bankruptcy/Consumer proposal

One of the most common reasons that stops a person from contacting a trustee in bankruptcy is the fear of the unknown.  Hopefully our new blog will help reduce those fears and enable you to make informed decisions on what is best for you and your creditors.  

Life after a proposal or a bankruptcy will not be the same as before.  There will be changes that you will need to control.  In order makes some changes to recover financially and emotionally, you must ask yourself, “How did I get here?” and “What could I have done differently?”  The answers to these questions will help you reflect and regroup to create a better chance at financial success in the future. 

In most cases, one of the biggest changes you find once you have completed a proposal or a bankruptcy is that you are debt free. This change will give you less financial pressure and more disposable income with which to plan.  One of the best approaches for financial recovery is to become a saver.  This is the time to get serious about creating a realistic budget and sticking to it.  In addition, you must make a plan for the future to deal with unexpected events.  Doing so will keep you from falling into debt should the unexpected occur.  Building savings will give you peace of mind and confidence because you are prepared for your financial future. Further, when considering large purchases, remember “money talks”.  For example, you may be able to negotiate lower prices if you use cash instead of credit.

A comment often heard during consultations at our office is that you will not be able to obtain a credit card for 7 years after a bankruptcy or proposal.  This is simply a myth. Once you are discharged from your debts you will be able to obtain a secured credit card.  During a proposal, you may also obtain a secured credit card.  With a secured card, you usually deposit a specific amount, such at $1,000 into an interest bearing account, and that $1,000 becomes a credit limit.  This will enable you to begin to rebuild your credit rating immediately. Your credit rating will be affected for 6 years from your bankruptcy discharge and 3 years for a proposal from the date of completion.  During that time we recommend that you be proactive in re-establishing your credit. 

In conclusion, when you are exploring your financial options whether it is a consumer proposal or bankruptcy make sure that you separate fact from fiction and make the right choice for a fresh start.

Rebuilding your credit rating

It is important to have good credit in our society as it is required for most things, such as booking a hotel room or an airplane ticket.  As well, most people can only finance big items (ie: home, car, etc) with the assistance of credit.  The following are easy tips for anyone seeking to improve their credit:

  • Obtain a copy of your credit report.  You can obtain a free report from Equifax.  Ensure that the information on your report is accurate and fix any errors that appear.  You can correct the errors by contacting the creditor directly and/or contacting the credit-reporting agency to have them investigate and fix the error.
  • Ensure that you pay your bills in full by the due date. If you aren’t able to do this, pay at least the required minimum amount when it is due to maintain your credit rating. If you miss the due day, this will have a negative impact on your credit rating. 
  • Maintain your outstanding balances at a minimum level.  Try to keep your balance below the limit. Higher levels of debt, will impact your credit rating.
  • Don’t apply for to many credit cards/loans in a short period of time.  If too many potential lenders inquire about your credit over a short period of time, this will have a negative effect on your credit rating.  
  • It is important to build a credit history; as such, it is smart to keep older credit. If you want to payout your loans or cancel your credit cards, it is best to keep one to provide a history to future lenders.
  • One great way to re-establish your credit history is by using a secured credit card. Ensure that you make the monthly payments on the due date.   A prepaid credit card is not a secured credit card as it does not report to the credit bureau.

On an on-going basis, it is always a good thing to obtain a copy of your credit report, every few years, to ensure that the information on your report is correct.